Japan-based Sumitomo Mitsui Banking Corporation (SMBC) looking to increase its shareholding in Rizal Commercial Banking Corporation (Rizal Bank), Bloomberg has reported citing sources.

The Japanese lender is working with financial advisers for the acquisition.

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Currently, SMBC owns a nearly 5% stake in Rizal Bank, a Filipino commercial banking group and aims to expand its footprint across Southeast Asia through the deal.

The deal could involve the acquisition of both primary and secondary shares, the sources said.

Deliberations are still on, and a final decision is yet to be made with regards to the size of the stake to be acquired.

The additional stake is expected to strengthen cooperation between the two firms.

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In 2021, SMBC acquired a 4.99% stake in Rizal Bank for $87m.

The news comes as the Philippines-based lender is looking to expand its digital banking offerings and reduce operational costs through digitalisation.

Meanwhile, In December 2021, SMBC EO Jun Ohta revealed that it is working on acquisitions and integration of its locally acquired operations to create a leading financial conglomerate in the Asian region.

Other than the Philippines, SMBC’s expansion strategy is focused on India, Indonesia, and Vietnam.

To this end, SMBC signed a $2bn deal to acquire a majority stake in the non-banking financial company (NBFC) Fullerton India Credit Company in July 2021.

Before that, SMBC Consumer Finance (SMBCCF), signed a deal to acquire a 49% equity stake in Vietnam’s VPBank Finance Company (FE Credit).